SCHEDULE: Turnstone Biologics Acquired by XOMA

Versant entities report full divestment of Turnstone Biologics shares following its acquisition by XOMA Royalty Corporation.

Summary

• Turnstone Biologics Corp. was acquired by XOMA Royalty Corporation through an all-cash tender offer and subsequent merger.
• The merger agreement was entered into on June 26, 2025, with the tender offer expiring on August 7, 2025.
• On August 11, 2025, Purchaser (XRA 3 Corp., a wholly-owned subsidiary of XOMA) accepted all validly tendered shares.
• The merger was completed on August 11, 2025, making Turnstone Biologics a wholly-owned subsidiary of XOMA.
• Versant Stockholders (including Versant Venture Capital V, L.P. and other affiliated entities) tendered all 3,381,692 of their Common Stock shares.
• Shareholders received a cash payment of $0.34 per share and one non-transferable contractual contingent value right (CVR) for potential future milestone payments.
• As of August 11, 2025, the Versant Reporting Persons ceased to beneficially own more than 5% of Turnstone Biologics' outstanding Common Stock.

Sentiment

Score: 7

Explanation: The sentiment is positive for the reporting entity (Versant) as they successfully completed their exit from the investment, realizing a cash payment and a contingent right. For the acquired company's shareholders, it represents a completed liquidity event, though the CVR introduces some uncertainty.

Positives

• Versant Stockholders successfully exited their investment in Turnstone Biologics by tendering all their shares.
• The transaction provided a clear liquidity event for shareholders, including a cash payment and potential future CVR payments.
• The merger completed as planned, indicating a smooth execution of the acquisition process.

Negatives

• The contingent value right (CVR) is non-transferable, limiting liquidity for this portion of the consideration.
• The value of the CVR is uncertain and dependent on the achievement of specified future milestones.

Risks

• The contingent value right (CVR) carries the risk that specified milestones may not be achieved, resulting in no additional payments to holders.

Future Outlook

Turnstone Biologics Corp. is now a wholly-owned subsidiary of XOMA Royalty Corporation, and its independent future outlook is integrated into XOMA's operations. Former shareholders who received contingent value rights (CVRs) have a future outlook tied to the achievement of specified milestones that would trigger additional payments.

Industry Context

This filing details the completion of an acquisition in the biotechnology sector, where larger entities often acquire smaller, specialized companies for their pipeline assets or technology. Such transactions are common strategies for portfolio expansion and shareholder liquidity in the biotech industry.

Stakeholder Impact

• Shareholders of Turnstone Biologics received cash and contingent value rights for their shares, providing a liquidity event.
• Turnstone Biologics employees and operations are now part of XOMA Royalty Corporation.

Next Steps

• Potential future payments to CVR holders upon the achievement of specified milestones.

Key Dates

Keywords

Turnstone Biologics, XOMA Royalty Corporation, Merger, Tender Offer, Acquisition, Schedule 13D, Versant Venture Capital, Contingent Value Right, Biotechnology, Pharmaceuticals